’04 Elections Expected To Cost Nearly $4 Billion

WASHINGTON, D.C. – The 2004 presidential and congressional elections will cost a record $3.9 billion, according to projections based on a study of campaign finance figures by the nonpartisan Center for Responsive Politics. The estimate represents a 30 percent increase over the $3 billion spent on federal elections four years ago.

The presidential race alone, fueled by massive spending by President Bush, Sen. John Kerry, the political parties and a host of advocacy groups spending millions on ads and voter mobilization, will cost an unprecedented $1.2 billion or more, according to the Center’s estimates.

The spending increases are due in significant part to the sharp rise in limited “hard” money contributions to federal candidates and party committees. The 2004 campaign is the first to take place under the new campaign finance law known as the Bipartisan Campaign Reform Act. The law raised contribution limits for individuals and banned unlimited “soft” money contributions to the national political parties.

“The 2004 presidential and congressional elections will shatter previous records for spending, and the biggest reason is the increase in giving by individuals to candidates and parties,” said Larry Noble, the Center’s executive director.

The largest chunk of money in this year’s elections—by far—is coming from individuals giving to federal candidates and political parties, continuing a years-long trend. Individual contributions will total $2.5 billion by the end of the current election cycle, according to the Center’s estimates. That represents a significant jump over the $1.5 billion in individual contributions raised in the 2000 election cycle.

Contributions from political action committees will total $384 million in this year’s elections, an increase of 33 percent over the elections four years ago, when PAC giving accounted for $288 million.

Federal candidates will have poured $144 million in personal funds into their campaigns by the cycle’s end, according to the Center’s projections. Candidates in 2000 spent $205 million of their own money, but that included the record $60.2 million invested by former Goldman Sachs chairman Jon Corzine into his successful Senate campaign and $48 million spent by Steve Forbes on his failed presidential bid.

Spending by 527 groups, named for a section of the tax code, is expected to reach $386 million this cycle. The total includes only 527s active in federal elections. Not included in the projection is election-related spending by 501c organizations, which need not disclose their contributions or expenditures. Beginning late in the 2000 cycle, 527s were required to file detailed financial reports with the Internal Revenue Service.

The Presidential Race

It has long been assumed that this year’s presidential election will be the most expensive ever. The Center’s $1.2 billion estimate bears that out. However, this figure includes a very conservative estimate of spending by advocacy groups.

The Center has projected spending by five of the most active 527s in the presidential election to be $187 million. But the total amount spent by 527s and 501c organizations on the presidential race is certain to be far higher than that. For example, the New York Times reported yesterday that advocacy groups will spend more than $350 million on get-out-the vote efforts alone.

The total spent on the 2000 presidential race is difficult to estimate. Total receipts by the presidential candidates (private and government funds) and public funding for the party conventions equaled $529 million. But total spending also included an untold amount of money from the political parties and advocacy groups.

Other Findings

The Center’s study also found the following:

Maxing Out to Presidential Candidates:

Nearly as many individuals have given the maximum allowed to a presidential candidate in this cycle so far as in the entire 2000 cycle, despite the increase in contribution limits. This cycle’s presidential candidates had raised the maximum $2,000 from 106,595 individuals through August. That compares with the 108,668 people who contributed $1,000, the old limit, to a presidential contender four years ago.

Presidential candidates have become more reliant on maximum contributions under the new limit. This cycle’s presidential hopefuls have raised nearly 29 percent of their total receipts in $2,000 contributions, while presidential candidates four years ago raised 22 percent of their money in contributions of $1,000.

The figures include contributions to general election legal and accounting compliance (GELAC) funds. President Bush and Sen. John Kerry may no longer raise private funds for their campaign accounts because they accepted general election public funding, but they may still raise up to $2,000 per individual donor in their GELAC accounts. Third party candidates may continue raising private funds.

Maxing Out to Congressional Candidates:

With contribution limits set at $2,000 per election, an individual can give a maximum of $4,000 to a congressional candidate who makes it past the primary to compete in the general election. More than 12,000 individuals have contributed $4,000 to a congressional candidate in the current cycle so far.

With a few months of the election cycle remaining, that figure is likely to approach the 15,135 individuals who contributed $2,000 to a congressional candidate under the old limit four years ago.

Congressional candidates are less reliant on maximum contributions in the current cycle than they were in 2000. Just over 8 percent of the money to congressional candidates has been raised in $4,000 chunks this year, compared to the 11 percent raised under the old maximum in 2000.

Maxing Out to Parties:

The political parties are raising the maximum from far fewer people in the current cycle than they did in 2000, a sign of their renewed effort to raise small contributions. Under current limits of $25,000 to a party committee per year, an individual may give up to $50,000 to a party committee per cycle. There are 530 people who have done so in the current election cycle so far.

That’s a little more than half of the 1,013 people who contributed $40,000 to a party committee in the 2000 cycle. (The old limit was $20,000 per year.)

Giving by Women:

Women are contributing a bigger share of large individual contributions in the current election cycle than at any time since 1989. Female donors have given 28.9 percent of the money collected in amounts greater than $200 by federal candidates, political action committees and parties, the Center found. Women contributed 26.1 percent of that money in the 2000 cycle and 24.4 percent in the 1996 cycle.

The most significant change in female giving has been to the political parties. In the current cycle so far, women have contributed 29.2 percent of the money the parties have raised in amounts over $200. Women contributed 23.3 percent of the large individual contributions to the parties in the 2000 cycle, and 21.3 percent of such contributions in the 1996 cycle.

One reason for the change could be the ban on soft money contributions to the political parties. Women used to give a lower proportion of soft money than they gave of hard money, suggesting that when limits are in place, contributions from wealthy income-earners are often bolstered by donations from their spouses.

The Center’s estimates are based on campaign finance figures released this week by the Federal Election Commission and the Internal Revenue Service. Each election cycle is two years long.

The Center’s breakdown of projected spending in the 2004presidential race:

Individual contributions to presidential candidates

$617 million

Public funds to presidential candidates and party conventions

$207 million

527 spending*

$187 million

Convention host committee spending

$139 million

DNC and RNC**

$92 million

PAC contributions to presidential candidates

$4 million

Candidate self-financing

$556,000

TOTAL

$1.2 billion

* This is a conservative figure that includes projected spending only by the following 527 groups: America Coming Together, Media Fund, MoveOn.org, Progress for America and Swift Boat Veterans for Truth (now called Swift Vets and POWs for Truth).

** Includes coordinated expenditure limits, independent expenditures and nearly $27 million in “shared TV expenditures” by the RNC.

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